Universal Sompo cuts back on group insurance mediclaim, that has been a drain on the firm

After an adverse loss ratio from group insurance offered to Indian Overseas Bank customers, Universal Sompo is now focusing on individual mediclaim policies for Allahabad Bank customers

Medical insurers laboring under big losses, mainly on account of the group insurance schemes they rushed into over the past few years, are on the retreat, with at least one company deciding to cut back on those schemes and focus to individual policies.

Universal Sompo General Insurance Company (USGICL) on Tuesday announced a new health insurance scheme for customers of Allahabad Bank, its joint venture partner, to push individual schemes, after two consecutive years of losses.

"We had a bad loss ratio, with group insurance offered through Indian Overseas Bank. It had to undergo upward revision," said ON Singh, executive chairman, USGICL. "Now, we are offering an individual health policy to customers of Allahabad Bank that can also insure dependent parents along with spouse and children. No medical checkups are required up to 45 years. Pre-underwriting health checkups will be at the cost of the company."

Universal Sompo, now in its third year of operation, piled up a loss of Rs53 crore last year. It has managed to reduce its losses to Rs30 crore, so far this year and hopes to breakeven next year. The company has an initial capital of Rs235 crore.

Universal Sompo said that it has sold 5,50,000 policies this year with a premium collection of Rs220 crore till now, and it is likely to exceed the target of Rs300 crore this year. Today, it has managed to restrict the group insurance component of its health insurance business to just 10%, while focusing on individual policies.

The company's latest offering, called 'Sampoorna Swasthya Kavach' will be available to savings bank, current account, recurring deposit account and term deposit account holders of Allahabad Bank, as well as NRIs on a payment of an annual premium. The policy could be for an individual or a family, on a floater basis. It has an optional critical illness rider.

This health insurance facility will be available to the customers through over 2,400 branches of Allahabad Bank across the country. The premium payments will have an auto debit option through the bank account. E Meditek Health Care Sevices is the third party administrator (TPA) for the 'Sampoorna' scheme.

Universal Sompo has set a target of one lakh policies under the 'Sampoorna' scheme in a year, to mop up between Rs60 crore and Rs70 crore. The cashless benefit is available across the country at over 3,000 hospitals. The minimum policy amount is Rs1 lakh and the maximum is Rs5 lakh. The premium for an individual policy of Rs3 lakh sum assured at the age of 36-45 is Rs3,827, whereas the premium for a family policy (self and spouse) for a similar sum assured and age group is Rs5,740.

Universal Sompo has also tied up with Indian Overseas Bank and Karnataka Bank for other schemes. The bancassurance model has more than 5,000 branches to sell insurance.

It has had a claims settlement ratio of 70%. On 1,08,000 claims received so far, about 80,000 have been paid.

The company is also targeting semi-urban and rural markets which have a low general insurance penetration. The focus of the company has been motor and health insurance and it sees potential in micro-insurance.

The company has 48 branches and 70 sales centers. They are planning for additional 22 branches.

In a rush to collect business over the past few years, several insurers offered specially-designed medical policies for group employees, covering major to very minor ailments, at cut rates. But with the claims running high, most of the insurers quickly began to run up losses.  


SEBI looking into the idea of setting up SME exchanges: Bhave

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) today said that it is looking into the idea of setting up of SME exchanges even though no bourses have formally approached it, reports PTI.

"We are very keen on that (SME exchanges)...We have initiated the process... finally it is in the hands of the exchanges to decide whether they want to create a separate platform for SMEs," SEBI chairman, CB Bhave, told reporters on a sidelines of a function here.

On 5th January, BSE chief executive officer, Madhu Kannan, had said that the country's premier bourse would announce the launch of its SME Exchange within a fortnight.

"We have made a number of presentations to the regulator and a few more are awaited. Within the next couple of weeks will be have a clearer picture on this and then we will be able to announce the roll out date," Mr Kannan had said.

The BSE, along with NSE and privately-promoted MCX SX are keen on setting up SME exchanges since SEBI floated the idea in June last year.

However, none of these exchanges have applied formally for a licence with the SEBI.

The government and capital markets watchdog mooted the idea of a separate exchange for small and medium enterprises last year, as the existing exchanges are too costly for them.

Proposed SME bourses will allow small companies to get listed at a lower cost and raise smaller amount of money from the primary markets, which will force these companies to adopt better corporate governance practises and in turn will get cheaper funds from capital market as well as from banks.


Personal finance Wednesday

ICICI Bank & Vodafone Essar ink pact for financial inclusion; Future Generali launches single premium ULIP; Reliance MF floats Fixed Horizon Fund-XVII-Series 5; Karvy launches investment plan with capital protection; Reliance MF launches Fixed Horizon Fund-XVIII-Series 1

ICICI Bank & Vodafone Essar ink pact for financial inclusion
ICICI Bank Ltd and Vodafone Essar Ltd have announced a joint initiative to drive financial inclusion in the country. Under this tie-up, both entities will offer a bouquet of financial products such as savings accounts, pre-paid instruments and credit products through a mobile phone based platform.

This partnership is expected to bring the un-banked and under-banked population into the organised financial services framework and assist in furthering the electronic payments market in India. ICICI Bank will leverage the distribution strength of Vodafone, which manages over 1.5 million retail points for acquiring customers and servicing them.

Chanda Kochhar, Managing Director & CEO, ICICI Bank Ltd said, "Mobile penetration is growing exponentially in the country of which the rural market forms a major contributor. There is a huge potential for offering mobile banking in these regions, which will facilitate access to the financially excluded parts of the society and ensure that benefits from various welfare and growth programs of the government reach them along with other financial services and products."

Both parties will work out the specific arrangements in the coming few weeks and chart out a go-to-market plan.

Future Generali launches single premium ULIP

Future Generali India Life Insurance Company, the Insurance joint venture between Future Group of India and Generali Group of Italy, has launched Future Generali Nivesh Preferred, a flexible one-time investment ULIP with simplicity as one of the key attributes of the product construct.

Future Generali Nivesh Preferred, while helping customers achieve their medium to long term financial goals. A single premium plan with two options on sum assured component, Future Generali Nivesh Preferred has four term options of 7, 10, 15, and 20 years and is available for customers in the age group of 7 to 68 years.

On maturity of the policy, fund value as on date will be paid to the life assured. The policy holder may also choose to receive the maturity benefit under settlement option through periodical payments for up to five years after the maturity date. Loyalty addition up to 7% for premium exceeding Rs50,000 is payable in addition. The minimum single premium is Rs40,000 and the maximum single premium is Rs4 lakh.

Future Generali Nivesh Preferred Plan offers two options to the customers to strike a balance between their insurance and investment needs. These options are: Option A offers a life insurance cover of 05 times the single premium in the first year and 1.25 times the single premium from the second year onwards. Option B offers a level life insurance cover throughout the policy term which may be ranging from 1.25 to 5 times the Single Premium. Further the customer will have an option to reduce the cover at any time from second policy year onwards. 98% of the premium paid in Future Generali Nivesh Preferred gets allocated to funds on the first day with a choice of six investment funds. These funds provide the investor flexibility to direct investments in any of the unit-linked funds of the company that match their risk appetite. 12 free fund switches per year means investors can leverage returns despite market volatility. Additional protection can be drawn, by taking an accidental death rider.

Reliance MF floats Fixed Horizon Fund-XVII-Series 5

Reliance Mutual Fund has launched Reliance Fixed Horizon Fund-XVII-Series 5, a close-ended income scheme.

The investment objective of the scheme is to generate regular returns and growth of capital by investing in central and state government securities and other fixed income/ debt securities normally maturing in line with the time profile of the scheme with the objective of limiting interest rate volatility.
The new issue opens on 12th January and closes on 18th January. The minimum investment amount is Rs5,000. The tenor of the scheme is 368 days.

Karvy launches investment plan with capital protection

Karvy Private Wealth, wealth management arm of Karvy group, has launched Aries, a structured product offering capital protection-oriented investments in multiple asset categories through a single product and which comes under the alternative asset class.

Aries is a 40 months investment product linked to the basket of Nifty and gold returns. A basket consists of 60% of Nifty units and 40% of gold units and brings in twofold benefits for investors-capital appreciation by participating in the equity markets and capital preservation and diversification by adding gold into the portfolio.

The product offers capital protection to the customers and pays 1.1 times the return on the positive basket performance with no upside cap enabling risk-averse investors not only total protection for their principal amount but will also receive 1.1 times return on investments based on the market performance.

Reliance MF launches Fixed Horizon Fund-XVIII-Series 1

Reliance Mutual Fund has launched Reliance Fixed Horizon Fund-XVIII-Series 1, a close-ended income scheme.

The investment objective of the scheme is to generate regular returns and growth of capital by investing in central and state government securities and other fixed income/ debt securities normally maturing in line with the time profile of the scheme with the objective of limiting interest rate volatility.
The new issue opens on 12th January and closes on 13th January. The minimum investment amount is Rs5,000.




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